Review of Misbehaving: The Making of Behavioral Economics

Author: Richard H. Thaler
Rating: 5 Stars
Review By: Shana

Thaler is an absolute gem, and if this book is any guide, he must be a fantastic professor. Misbehaving manages to be insightful, humorous, educational, and eye-opening as it introduces the reader to behavioral economics. Having read this excellent book, it is not surprising that Thaler won the 2017 Nobel Memorial Prize in Economics.

Misbehaving is in line with a handful of other books that highlight the nagging truth that, in modern times and interacting with novel and complex systems, humans are not particularly rational and that some of the mental shortcuts we take that behooved us as we evolved do not necessarily assist us in modern-day decision-making. Explaining and exploring the facade of rationality acts to turn a mirror upon human behavior and help the reader understand their own irrational decisions. 

Thaler has a wonderful sense of humor and a keen eye for human fallacies. His curiosity (like that of Daniel Kahneman and Amos Tversky) about human behavior and his background in economics pair up nicely and allowed him to examine generally agreed upon economic and financial beliefs and question them. He points out a number of examples of irrationality, and various heuristics and biases, that might be familiar to readers who have read some other books in related fields (including Thinking, Fast and Slow; and Superforecasting). Nonetheless, Thaler's book is an excellent read. Many of his findings dovetail with those of Kahneman and Tversky (he worked with them both) and are all the more interesting as you understand that all of these findings were coming about contemporaneously and upending the economic world. 

Definitely recommended, if for no other reason than to understand yourself and your decision-making processes better, but also for the insight into how much framing an option can do to impact how people feel about it and consequently whether or not they take one action versus another.